No quiet on the northern front No quiet on the northern front No quiet on the northern front

No quiet on the northern front

Forex 4 minutes to read
Michael O’Neill

FX Trader,

Summary:  While hopes of a US/China trade settlement at the G20 meeting fade, China has intensified on another front by taking umbrage at Canada's stance on the Hong Kong protests.

The US/China trade war has reached a stalemate. Both sides traded tariffs and insults and are now awaiting the G20 meeting in Osaka, Japan, to see if presidents Trump and Jinping can restart the negotiations. That isn’t a sure thing. On Thursday, National Economic Advisor Larry Kudlow said there aren’t any formal plans for the two leaders to meet. 

It is not all quiet on the northern front. China has launched an offensive and Canada is getting battered. China remains exceptionally irritated by the arrest of Huawei CFO Meng Wanzhou at the request of the America’s. They believe Canada stuck its nose in where it didn’t belong. And they are punching said nose.

After Wanzhou’s arrest, China arrested two Canadians and charged them with spying. Prime Minister Trudeau reportedly called to intervene. China refused to accept his calls. China suspended licenses of two Canadian canola exporting companies, and Chinese buyers are unwilling to buy Canadian canola. China was the market for 40% of that product worth about $2.7 billion in 2018. China announced that Canadian pork and meat imports would receive extra scrutiny. 

China also objected to Canada foreign affairs minister Chyrstia Freeland defending Hong Kong residents’ right to protest. China responded, saying “Recently, some people from the Canadian government made irresponsible and erroneous comments on the Hong Kong [Special Administrative Region] government’s amendment to the ordinance and other Hong Kong affairs.” We deplore and firmly oppose this.... We urge the Canadian side to exercise caution in its words and deeds, stop intervening in the normal legislative process of the Hong Kong SAR, and stop in whatever form interfering in Hong Kong affairs and China’s domestic affairs.” 

 Communication between the two nations is a tad difficult. Canada never replaced its Ambassador to China after he was fired for apparently supporting Meng Wanzhou’s extradition defence. China’s Ambassador to Canada was reassigned to France last week.

The impact from the US, China, Canada trade dispute was a major factor in the Bank of Canada’s dovish monetary policy shift a couple of weeks ago. The increased risk that Canadian interest rates may be cut as early as October, combined with rising US/Iran tensions, increased risk aversion sentiment from Brexit and eurozone developments and the US/China trade talks impasse suggests that USDCAD strength ahead. The short term technicals are bullish following the rejection of losses below support in the 1.3250-70 area and the subsequent rally above resistance at 1.3350. A decisive break above 1.3420 would target further gains to 1.3550.
Chart:USDCAD daily. Source Saxo Bank

Quarterly Outlook 2024 Q3

Sandcastle economics

01 / 05

  • Macro: Sandcastle economics

    Invest wisely in Q3 2024: Discover SaxoStrats' insights on navigating a stable yet fragile global economy.

    Read article
  • Bonds: What to do until inflation stabilises

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain inflation and evolving monetary policies.

    Read article
  • Equities: Are we blowing bubbles again

    Explore key trends and opportunities in European equities and electrification theme as market dynamics echo 2021's rally.

    Read article
  • FX: Risk-on currencies to surge against havens

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperform in Q3 2024.

    Read article
  • Commodities: Energy and grains in focus as metals pause

    Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities in Q3 2024.

    Read article


The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (
- Full disclaimer (

40 Bank Street, 26th floor
E14 5DA
United Kingdom

Contact Saxo

Select region

United Kingdom
United Kingdom

Trade Responsibly
All trading carries risk. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more
Additional Key Information Documents are available in our trading platform.

Saxo is a registered Trading Name of Saxo Capital Markets UK Ltd (‘Saxo’). Saxo is authorised and regulated by the Financial Conduct Authority, Firm Reference Number 551422. Registered address: 26th Floor, 40 Bank Street, Canary Wharf, London E14 5DA. Company number 7413871. Registered in England & Wales.

This website, including the information and materials contained in it, are not directed at, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in the United States, Belgium or any other jurisdiction where such distribution, publication, availability or use would be contrary to applicable law or regulation.

It is important that you understand that with investments, your capital is at risk. Past performance is not a guide to future performance. It is your responsibility to ensure that you make an informed decision about whether or not to invest with us. If you are still unsure if investing is right for you, please seek independent advice. Saxo assumes no liability for any loss sustained from trading in accordance with a recommendation.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc. Android is a trademark of Google Inc.

©   since 1992